5 April 2006

Indonesia, Malaysia Agree to Jointly Expand Palm Oil Market

The world’s largest and second largest producers of palm oil, Malaysia and Indonesia, have agreed to form strategic alliance to expand production and market of the edible oil.

The cooperation is expected to increase the capacity of the two countries to meet the world demand for palm oil especially with the growing use of palm oil in the production of bio-diesel oil, the newspaper Kompas reported.

The report said the agreement was reached at a meeting in Kuala Lumpur last week between visiting Vice President Jusuf Kalla and Malaysia’s Vice Prime Minister Dato’ Sri Najib Tun Razak.

Kalla said the global demand for palm oil has increased with expected surge in bio-diesel oil requirement used as alternative fuel necessitated by the soaring prices of crude oil.

Kalla said Thailand will also be involved in the cooperation.

Including Thailand the three Asean countries control 90 per cent of the world palm oil market.